At the end of the first quarter, Procter & Gamble was the
largest holding in
Vanguard Consumer Staples ETF (NYSEArca: VDC)
at 12.4%. Pepsi was number five in the ETF at 7%.

Pepsi shares were up nearly 3% in afternoon trading
Thursday.

Pepsi "delivered quite solid results in the first quarter, and
if it can sustain its momentum over the next few quarters, we think
our investment thesis-that the multiple gap with Coca-Cola (
KO
) should close-may soon play out," said Morningstar's Philip Gorham
in a report on the earnings.

"Pepsi appears on track to meet our estimate of mid- to
high-single-digit earnings growth in 2011, and we are maintaining
our $76 fair value estimate and long-term outlook," he added.
"Trading at 15 times 2011 earnings, Pepsi is an undervalued stock
in an industry that could provide a safe haven if investors turn
defensive over the next few months, in our opinion."

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

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